[Click eStock] "Samyang Foods, Export High Growth Continues... Target Price Up"

Target Price Raised by 21% Compared to Previous Level

On the 16th, IBK Investment & Securities raised the target price for Samyang Foods from 240,000 KRW to 290,000 KRW, anticipating continued high growth in exports. The investment rating was maintained at 'Buy.'

Kim Taehyun, a researcher at IBK Investment & Securities, explained, "We raised the target price by 21% compared to the previous estimate due to upward revisions in the earnings per share (EPS) forecasts for 2024-2025," adding, "The high growth in exports is expected to continue, and there is a valid expectation of additional demand expansion due to product diversification."

Samyang Foods' operating profit for the first quarter of this year is expected to exceed market forecasts. Researcher Kim said, "On a consolidated basis for Q1, sales are estimated to increase by 27% year-on-year to 311.9 billion KRW, and operating profit is expected to rise by 80.4% to 43 billion KRW. Although sales may slightly fall short of the consensus (sales 325.9 billion KRW, operating profit 37.1 billion KRW) due to sluggish domestic sales, operating profit is expected to significantly exceed estimates due to lower input costs for wheat, starch, and palm oil, as well as the rise in the KRW-USD exchange rate."

Sales of noodles and snacks are expected to increase by 27.4% to 297.5 billion KRW. Researcher Kim stated, "While the total domestic ramen export volume improved by 30.1% in Q1, Samyang Foods' export volume is estimated to have increased by 42.6%. In particular, exports to China appear to have grown the most in March as logistics, which had been suspended due to the Chinese New Year (Spring Festival) in February, resumed. Demand has also expanded in the United States, Southeast Asia, and Europe."

Domestic sales are estimated to have decreased by 2.6%. Researcher Kim analyzed, "This is partly due to weakened consumer sentiment, but it can also be interpreted as a strategic focus on producing export products with higher selling prices and profit margins, given the limited remaining production capacity. Additionally, with reduced freight subsidies and price discounts, domestic profitability is estimated to have improved."

Diversification of the export product portfolio is seen as a factor that enhances medium- to long-term growth potential. Researcher Kim said, "Until 2022, the original Buldak Bokkeummyeon accounted for more than 50% of export products, but last year this proportion shrank to around 40%. The diversification of the export product portfolio, including products like Carbo Buldak Bokkeummyeon, is positive in terms of growth potential and sustainability in overseas markets."